By Dan Eduard – The U.S. dollar has steadily been making gains against the Danish krone since the first week of August. In the last 3 weeks or so, the pair has gone up around 2600 pips. As we will illustrate through a number of technical indicators, the USD/DKK pair may finally be set for a bearish correction.
We will be looking at the 8-hour chart for USD/DKK, provided by Forexyard. The technical indicators used are the Relative Strength Index (RSI), Williams Percent Range and MACD/OsMA.
1. As we can be seen, the RSI is currently right around the 70 level, which typically indicates the pair is right on the edge of entering into overbought territory. Traders can take this as a sign that a bearish correction could occur in the near future.
2. Further supporting our theory, the Williams Percent Range is currently right at the -20 level. Anything above the -20 level is generally taken as a sign that the pair is in the overbought region, meaning downward movement is likely to occur.
3. Finally, in a clear sign of impending downward movement, the MACD/OsMA shows a cross has already formed well above any resistance levels. Analysts take this as a sign that the krone may finally be set to make some serious gains on its U.S. counterpart.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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